Correlation Between Air Lease and Sixt Leasing

Can any of the company-specific risk be diversified away by investing in both Air Lease and Sixt Leasing at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Air Lease and Sixt Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Lease and Sixt Leasing SE, you can compare the effects of market volatilities on Air Lease and Sixt Leasing and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Air Lease with a short position of Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Sixt Leasing.

Diversification Opportunities for Air Lease and Sixt Leasing

0.39

Correlation Coefficient

Air Lease  Sixt Leasing

Weak diversification

The 3 months correlation between Air and Sixt is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing SE and Air Lease is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Air Lease are associated (or correlated) with Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of Air Lease i.e., Air Lease and Sixt Leasing go up and down completely randomly.

Pair Corralation between Air Lease and Sixt Leasing

Assuming the 90 days trading horizon Air Lease is expected to under-perform the Sixt Leasing. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 1.22 times less risky than Sixt Leasing. The stock trades about -0.07 of its potential returns per unit of risk. The Sixt Leasing SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  950.00  in Sixt Leasing SE on December 20, 2024 and sell it today you would earn a total of  20.00  from holding Sixt Leasing SE or generate 2.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Air Lease  vs.  Sixt Leasing SE

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sixt Leasing SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt Leasing SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sixt Leasing is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Air Lease and Sixt Leasing

The main advantage of trading using opposite Air Lease and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Sixt Leasing can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sixt Leasing will offset losses from the drop in Sixt Leasing's long position.

The idea behind Air Lease and Sixt Leasing SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.